• Sona Wegner, MBA, Founder

How to start a dental bookkeeping checklist to follow in your practice today.

Updated: Apr 27, 2019




When you have finished entering your transactions from your bank and credit card accounts, do you go back and check your work? Does your CPA have to constantly remind you to do certain tasks or do you have to constantly remind your dental practice's bookkeeper? Here at Bookkeeping for Dentists, every staff accountant must complete a monthly checklist for each practice they finish for month-end bookkeeping. Without our dental bookkeeping checklist, I'm not sure how we would function. It's a huge part of the quality in our work.


I'd like to share our Bookkeeping for Dentists monthly checklist with you and walk you through the items on it so you can also achieve the same quality bookkeeping. If you're not the one doing your bookkeeping, then this would be great to share with your current bookkeeper or accountant to follow along.


Dental Office Bookkeeping Checklist:

  1. What to remember before beginning the bookkeeping

  2. Download documents and save to online document storage

  3. Enter and accept all transactions in QuickBooks

  4. Formally reconcile all bank and credit card accounts in QuickBooks

  5. Gross up and reconcile payroll transactions to payroll reports

  6. Adjust loan accounts for interest and principal

  7. Consider special items (ie: Care Credit Fees)

  8. Quality Review Check (Always go back and check your work)


We start every new client with the same template checklist and continue to add and adjust as we work with the dental practice's bookkeeping each month. Work through the steps below and add your own individual needs along the way.


1. What to remember before beginning bookkeeping


There are some things to remember before you dig into bookkeeping because if you start to work and you have forgotten to do something a certain way, it could be quite the mess to go back and make changes. Therefore, at the top of our checklist, we list items that we need to remember before we start anything.


For example, one important rule in our bookkeeping process, (but so rarely followed by almost every practice that comes to us) is each and every transaction in QuickBooks needs a vendor name. It's super easy to miss because of the way QuickBooks imports the transactions from the bank without the names in the vendor column but has it in the memo. Let me know if you'd like me to explain the importance of this and how to do it in more detail, but this is a good example of what you have to remember to do before you start doing anything. Going back and adding names to all of the transactions after they have been added would be a very time consuming mess.


Missing vendor names in QuickBooks Online transactions (samples)

These types of items are at the very top of our checklist. Can you think of a few things you keep forgetting to do or something special you'd like your dental practice bookkeeper to remember? Put it at the top of the checklist!


2. Download these documents and save with bookkeeping records


We download and organize all month-end bookkeeping related documents for our dental practices into Dropbox folders for each client. We chose Dropbox because it's HIPAA safe and easy for clients and their CPA's to access so you will see me referring to Dropbox. But there are other storage options you can choose from obviously. Paperless is best, always.


On our bookkeeping checklist template the following items are there to download and save to Dropbox (or paperless storage of your choice) every month:

  • Checking account statements

  • Check copies from checking account

  • Savings account statements

  • Credit Card statements

  • Loan activity with month-end principal balance if available

  • Payroll reports per pay period showing gross pay, net pay, deduction details, and employer taxes withheld.


3. Enter and accept transactions in QuickBooks


Whether you manually enter transactions or import them from the bank account, you will need to enter/accept transactions in QuickBooks to officially record them. But whatever you do, it needs to be for all of the business bank and credit card accounts through the current date or at least the last day of last month. Our checklist tells our staff accountants to record transactions to the current date (the date they are working on the client).


  • Checking accounts transactions

  • Savings accounts transactions

  • Credit card accounts transactions


4. Reconcile Bank & Credit Card accounts in QuickBooks


Here is a very important step often skipped by inexperienced bookkeepers. Formally reconciling every bank account, credit card and loan account on the balance sheet is a must to make sure you have everything recorded correctly such as no duplicates and no deductions missing. When I say formally, I mean going to the gear icon in QuickBooks Online and clicking the "Reconcile" feature under the tools menu.


Reconcile feature inside QuickBooks Online

This is important to do every month so you have accurate numbers. And the QuickBooks Online reconcile feature will walk you through reconciling any account on your balance sheet. It also leaves you and your CPA historical reconciliation reports which CPA's depend on for their review work. Give it a try if you haven't, then add this to your checklist to be done every month.


5. Reconcile payroll & gross it up


Another step that is often missed by inexperienced dental bookkeepers would be to reconcile payroll. I can't even tell you the countless payroll mistakes we find practice owners making after we reconcile payroll each month. Manual paychecks written that don't match payroll reports, taxes withheld that weren't paid over, voided payrolls that weren't voided correctly. It happens a lot, but the only way to catch these mistakes is to reconcile payroll to the payroll reports for each pay period. To do this, you'll just make sure the gross pay and employer payroll tax totals on the Profit & Loss matches the payroll reports. This might also include checking deductions, garnishments, etc. Comment below if you'd like another blog post explaining this process in more detail.


We also break payroll down by department. The nice thing about Gusto Payroll, is anytime a new person is added, they are put into a department in the payroll software, then it syncs with QuickBooks Online by department. But if you're doing it manually on the books, remember to separate new people into their departments on the Profit & Loss report. When I say department, I mean Hygiene, Dental Assistants, Associates, Admin staff, etc. Also break down the employer payroll taxes by department too so you can benchmark department costs better.


6. Adjust for loan interest and principal


Loan interest can make a big difference for your Profit & Loss report, not to mention overhead benchmarks. There are two ways you can record loan interest correctly:


  • Record the whole loan payment to the balance sheet loan account, then make a journal entry moving the interest portion of the payment to your interest expense account.

  • Split the loan payment transaction into two, the principal portion goes to the loan liability account on the balance sheet and the interest portion goes to the interest expense account on the Profit & Loss.

Whichever way you decide is best for you, make sure your loan balance on the balance sheet matches the principal balance of your loan that the bank has for the specified period.


7. Special items


This checklist section is the place we might add special situations for each individual dental practice to remember before we finish up the bookkeeping for the month. Here are some common things added to this checklist item:


  • Adjust deposits (income) for Care Credit Fees

  • Record inter-company loan transactions with the other entity so the loans match

  • Split Patterson Dental transactions by supplies and software


8. Final quality review check (always go back and check your work!)


Do you remember your math teacher always nagging you in school to go back and check your work? Well it's just as important with bookkeeping for your dental practice. Our bookkeepers at Bookkeeping for Dentists go back and check their work every month. They don't just check the month-end work, but they go back and check the entire year, 12 times a year. Here are some things we have on our checklist for going back and checking your work:


  • Review outstanding checks on reconciliation report and make sure they are not duplicates then consider following up with vendors.

  • Ask about payroll checks that haven't cleared after a couple weeks

  • Go back and make sure the ending balances of bank accounts are still the same after reconciliation

  • Patient refunds are properly recorded with the vendor name "Patient Refund" and not the actual patient name. Add patient name to memo. (this is to avoid a massive vendor list of patient names in QuickBooks since you already have their names in your Practice Management Software.

  • Check for significant amounts recorded in dental supplies that might be equipment over $2,500. (Anything under $2,500 falls under the IRS de minimis safe harbor threshold for expensing instead of capitalizing.)

  • Consider moving equipment under $2,500 to de minimis expense account.

  • Review all transactions and all accounts on General Ledger report. Check for inconsistencies, questionable personal vs. business items, and anything that should be looked at in more detail.


Checklist Summary:


There is a lot to consider when keeping your dental practice bookkeeping correctly up-to-date. This checklist breaks it down with important steps you can you follow and build on as you work through your own bookkeeping each month and year. We have a different checklist for the end of the year when closing the books for the CPA to take over. I will do another post for that one if you'd like to see it.


As always, thank you for reading and don't forget to subscribe to our blog for updates on new posts like this!

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